Great Elm Capital Corp. Q2 FY2025 earnings call

• GECC had a tremendous quarter with highest total investment income and NAV growth over $0.60 per share. Q2 2025 was the highest cash generative quarter with cash TII at ~90% of total investment income.
• NII exceeded quarterly distribution, up ~29% sequentially. Trailing 12-month TII and NII increased by 29% and 32% respectively.
• Portfolio performance improved with NAV per share increase driven by unrealized gains on CoreWeave-related investment. Focus on secured debt positions, with CLO platform a significant contributor.
• Great Elm Specialty Finance executed strategic transformation, rebranded Sterling as Great Elm Commercial Finance, exited equipment leaseholding at a gain, paid down subordinated debt, and Great Elm Healthcare Finance positioned for growth.

In the second quarter of 2025, Great Elm Capital Corp. (GECC) achieved the highest total investment income in its history at $14.3 million. Cash total investment income (TII) comprised approximately 90% of total investment income. Net investment income (NII) was $5.9 million or $0.51 per share in Q2 2025, up from $4.6 million or $0.40 per share in Q1 2025. NAV per share increased to $12.10 as of June 30, 2025, from $11.46 as of March 31. The corporate portfolio was nearly $240 million, with first lien loans making up 2/3 of the corporate portfolio as of June 30. The CLO JV had $52 million deployed by June 30, and an additional $6 million was deployed into a new CLO investment outside the JV.

• Anticipate Q3 NII per share to step down similarly to Q4 2024, but Q4 NII to rebound significantly. Full-year 2025 NII per share expected to exceed 2024 levels and cover increased distribution rate of $1.48 per share annualized.
• Board authorized $0.37 per share cash distribution for third quarter, payable on September 30.

• Uneven cash flows from growing CLO platform at early stages. Potential impact of tariffs on portfolio with minimal direct impact but possible supply side effects. Volatility in CoreWeave equity post-IPO. Nonaccrual of Maverick Gaming and Del Monte investments, but expectation of portion returning to accrual in second half of 2025.

Q: Wanted to understand the impact of the dividend on preference shares and insurance-related investment, quantify the amount and if ongoing.

A: The event is annual, benefit to NII is ~$1.6 million to ~$1.7 million net.

Q: Curious about CoreWeave investment, GP's intention on liquidity.

A: Up to GP to decide, underlying shares subject to lockup expiring this quarter, no concrete timeline to share yet.

Q: Relative attractiveness of additional corporate debt vs CLO equity opportunities.

A: Corporate debt secondary market strengthened, shifted focus to private side transactions, closed a transaction last week and expect another next week.

Q: About Maverick Gaming investment moved to nonaccrual, what changed.

A: Active dialogue with company, situation not improving, company filed for bankruptcy, so put on nonaccrual.

Q: Expectation of Maverick and Del Monte returning to accrual.

A: Largely tied to DIP funding, when DIP funded, portion of pre-petition debt rolled into DIP and starts accruing interest during bankruptcy case.